The Zacks Analyst Blog Highlights: Halliburton, First Solar, Goldman Sachs
Group, Sempra Energy and Canadian Solar
PR Newswire
CHICAGO, April 3, 2013
CHICAGO, April 3, 2013 /PRNewswire/ --Zacks.com announces the list of stocks
featured in the Analyst Blog. Every day the Zacks Equity Research analysts
discuss the latest news and events impacting stocks and the financial markets.
Stocks recently featured in the blog include Halliburton Co. (NYSE:HAL), First
Solar, Inc. (Nasdaq:FSLR), The Goldman Sachs Group, Inc. (NYSE:GS), Sempra
Energy (NYSE:SRE) and Canadian Solar Inc. (Nasdaq:CSIQ).
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Here are highlights from Tuesday's Analyst Blog:
Halliburton Downgraded
On Mar 29, Zacks Investment Research downgraded oilfield services behemoth
Halliburton Co. (NYSE:HAL) to a Zacks Rank #3 (Hold).
Why the Downgrade?
Houston, Texas based Halliburton continues to be plagued by sluggish North
American operations, a spike in the costs for guar gums, and potential
liability exposure to the Deepwater Horizon rig disaster.Detailed Analysis
The North American land rig count may plateau in the near future as growth in
highly-productive horizontal drilling has led to a natural gas supply overhang
and relatively weak natural gas prices in the U.S. market. This is likely to
be only partially offset by the continued growth of oil- and liquids-rich
reservoirs. A slowdown in U.S. land drilling will impair Halliburton's
business.
A substantial relief in the cost for guar gum – a key constituent of the
company's market-leading hydraulic fracturing ('fracking') procedure – is not
expected until well into 2013.
We remain concerned over the ensuing uncertainty regarding Halliburton's
potential liability exposure to the Deepwater Horizon rig disaster. A final
assessment report issued by the federal government in September 2011 blamed
the company for the 'poor cement job' that allowed the oil/gas to burst
through the reservoir and reach the rig, causing the explosion.
First Solar Acquires Solar Gen 2
First Solar, Inc. (Nasdaq:FSLR) has completed the acquisition of Solar Gen 2
power project from a subsidiary of The Goldman Sachs Group, Inc. (NYSE:GS),
Energy Power Partners and a third equity partner for the project. The
financial terms of the transaction were not disclosed.
As a part of the transaction, First Solar will also get hold of 40 megawatt of
direct current (MWDC) of solar modules purchased earlier for the solar
photovoltaic ("PV") plant from another supplier. Following the transaction,
First Solar will supply the remaining modules for the plant and provide
project development, engineering, procurement and construction, and grid
integration services.
Located in Imperial County, Calif., near El Centro, the solar power project
has an electric generation capacity of 150-megawatt alternating current
(MWAC). It will generate sufficient electricity to power more than 60,000
average Calif. homes. It will displace more than 115,000 metric tons of CO2 on
an annual basis which is equal to eradicating 22,000 cars off the road.
Moreover, this project will save 93,000 metric tons of water annually.
Under a 25-year agreement, San Diego Gas & Electric Company (SDG&E), a
subsidiary of
Sempra Energy
(NYSE:
SRE
), will purchase all the electricity generated from the project. This will
help Sempra in meeting its renewable portfolio standard requirement that calls
for generating 33.0% of renewable power by 2020.
Besides being eco-friendly, the project also fulfills its corporate social
responsibility well. Solar Gen 2 is expected to create more than 800
construction jobs in Imperial County on an average. Currently, the region is
suffering from high unemployment. The company expects the construction of the
solar PV plant to begin in 2013 and complete in 2014.
First Solar is a leading global provider of comprehensive PV solar systems.
The company designs, manufactures, and sells solar electric power modules
using a proprietary thin film semiconductor technology. First Solar makes
cadmium telluride glass substrate-based thin film PV panels. Unlike
silicon-based solar cell manufacturers who produce crystalline silicon PV
cells, First Solar makes thin-film PV panels on glass substrates.
Currently, the company is working on a major restructuring plan to counter the
continuous drop in margins. The fall in margins came in the wake of a
precipitous drop in Average Selling Prices due to a supply glut in the market.
We also remain concerned about the current macro scenario which does not bode
well for solar energy producers who thrive mainly on subsidies and grants. The
company presently retains a short-term Zacks Rank #3 (Hold).
In the near term, we would advise investors to accumulate its short-term Zacks
Rank #2 (Buy) peer
Canadian Solar Inc.
(Nasdaq:
CSIQ
).
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